Sony Reports 10% Increase in Profits Driven by Image Sensors and Games
Sony reports a 10% rise in operating profit for the April-June quarter. Profits in the image sensors business nearly tripled, driven by foreign exchange effects and increased sales. Sony raises its full-year profit forecast by 3% to 1.3 trillion yen.
The Japanese conglomerate's profit reached 279 billion yen (US$1.90 billion), exceeding the average estimate of 275 billion yen from seven analysts surveyed by LSEG.
The image sensors business experienced a significant boost, with profits nearly tripling to 36.6 billion yen, propelled by foreign exchange effects and increased sales. Sony, known for its diverse portfolio spanning music, movies, games, and semiconductor chips, has raised its full-year profit forecast by 3% to 1.3 trillion yen, supported by favourable foreign exchange rates.
Recent market volatility following the Bank of Japan's interest rate hike and concerning U.S. labour data has raised apprehensions about economic uncertainties. Sony's President, Hiroki Totoki, expressed unease about sudden currency fluctuations and the potential for an economic downturn, particularly in the United States, during an earnings briefing.
The yen's appreciation has prompted investors to reevaluate the prospects of Japanese multinational corporations, as the weaker currency previously provided a buffer for major exporters. Sony's projected exchange rate for the year stands at around 145 yen to the dollar, although recent trading rates have hovered around 147 yen, contrasting sharply with the 38-year low of nearly 162 yen recorded at the beginning of July.
In the first quarter, Sony sold 2.4 million PlayStation 5 (PS5) units, slightly fewer than the previous year, yet managed to achieve higher profits in its games segment. Despite the slight decline in sales, the company aims to sell 18 million PS5 units this fiscal year, down from 20.8 million units sold the previous year. The games industry is grappling with escalating costs and limited pricing power, as evidenced by Sony-owned developer Bungie's recent announcement of a significant workforce reduction.
While Sony's music division saw a 17% profit increase to 85.9 billion yen, its movies business experienced a 29% decline, with profits dropping to 11.3 billion yen. Sony's shares remained stable before the earnings report and have declined by 8% year-to-date, resulting in a market capitalization of just over US$100 billion.
Sony reports a 10% rise in operating profit for the April-June quarter.
Profits in the image sensors business nearly tripled, driven by foreign exchange effects and increased sales.
Sony raises its full-year profit forecast by 3% to 1.3 trillion yen.
Source: REUTERS